Mutualist Blog: Free Market Anti-Capitalism

To dissolve, submerge, and cause to disappear the political or governmental system in the economic system by reducing, simplifying, decentralizing and suppressing, one after another, all the wheels of this great machine, which is called the Government or the State. --Proudhon, General Idea of the Revolution

Sunday, July 31, 2005

Carnival of the Un-Capitalists

Thursday, July 28, 2005

Some Good Material on Labor Issues

Presto has an excellent post on the potential of worker co-ops. There's also some great discussion in the comment thread on ventures into cooperative production by the Knights of Labor (a practice which, I believe, was actually pioneered by Owenite workers in the UK).

I'm still pissed at the neolibs at QandO Blog for misappropriating the term "New Libertarian," but this post by Dale Franks is too good to pass up.

Franks mocks the Wall Street Journaleditorial on the crash and burn of the AFL-CIO, whose "friendly advice" to organized labor is "a lot like hiring a fox to give self-defense training to chickens." The WSJ's advice, as Franks characterizes it, is "become Republicans":

Yes, forget about all that tedious labor action, and striking. Does no one any good, you know. You know what American workers should get involved in? School vouchers. Yes, that's right. Don't worry about your fellow working people. Their jobs are toast anyway, so you might as well write them off. Oh, and while we're on the subject, if you could help deliver us, your employers, from the responsibility of providing health care for you—maybe by, you know, buying it yourself—that would be nice, too. The stockholders would be pleased by the jump in earnings. And you know how you could be a really good "partner" with your employers? Take a pay cut. That'll really help keep us afloat, too. I mean, we gotta pay for that Gulfstream V that we take to Barbados for our corporate retreats somehow, am I right?

Franks continues, in his own voice:

....expecting organized labor to roll over like weasels and expose their softest parts is just a fantasy. It would kinda obviate the entire point of organized labor, and I'm just not sure we want to do that.

Oh, sure, I gotta admit that unions irk me. There are high-school dropouts making $22.50 an hour slicing deli meats at Safeway, and getting full medical and dental. That's a pretty good gig, no matter how you look at it. And, let's face it, it isn't Safeway thats paying for it, I am. Union-boy is making it harder and more expensive to feed my family.

But—and this is an important "but"—I don't like the power of corporate America, either. Being a good libertarian, I distrust aggregations of power. I distrust them in the private sector, and I distrust them in the public sector.

Power corrupts, no matter who gets it. Give power to gentle, meek, God-fearing Churchmen, and the next thing you know, they're burning lonely old ladies at the stake for talking to their cats. Give power to corporations, and before you know, they're dumping gallium arsenide in open pits that soak into ground water, because it's cheaper than having the stuff hauled away to be disposed of properly, and then Lake Erie catches fire. Give it to unions, and in short order, high school dropouts will be slicing luncheon meats for $60 an hour, with options to put unlimited cocaine and hookers on their corporate expense accounts, and a head of lettuce will cost $15. Aggregations of power are bad.

Unionized labor can serve as a very useful counterbalance to the power of corporations. That might just be worth something, even something intangible, that we shouldn't want to give up, because corporations are not our kind benefactors, no matter how warm and fuzzy their TV commercials try to make them seem.

The trouble is, we're kind of limited in out ability to watchdog corporations. We can either do it through private organizations, like unions, or we can do it publicly, through government. There are plenty of advocates for both methods. But one notes that the politicians who would be responsible for regulating corporate America also tend to need political donations, often from corporate executives. Do the math.

If given a choice between organized labor watchdogging corporate America on a private basis, and the government doing it on a public basis...well, then all other things being equal, I'll choose unions every time.

I would add that unions are only in a position to get $22.50 wages for deli meat-slicers (if that actually happens) when the employer is in a cartelized oligopoly market that can pass its cost-plus markup on to the public. You see that kind of upper-middle class income for blue collar workers only when there's collusion between monopoly capital and the labor bureaucrats.

And there's another reason, besides the one Franks gives, for those assorted service unions to stop being "connected to the Democrats at the hip." Organized labor's position as a captive constituency gives the Democratic head of the One Corporate Party With Two Heads an excuse to take it for granted. It was only when the Teamsters threatened to bolt to Nader in summer 2000 that Al Gore started appearing in organized labor venues, looking for the union label, and talking about "the people versus the powerful." And even then, he had Holy Joe Lieberman, that paragon of integrity, quietly reassuring the WSJ that it was all just election year rhetoric.

The business union bureaucracies are an integral part of the corporate liberal coalition because they have an interest in common with the corporate players in that coalition. That interest is to impose order on the rank and file, and let the bosses manage without interference. That's not so bad when there's a large manufacturing sector that's willing to pay comparatively high wages in return for stability, as was the case before 1970 or so. But when most corporations decide that cutting a deal with the unions is no longer in their interest, and they prefer union-busting instead, that old Taylorist-Fordist bargain is a recipe for suicide. Wagner and Taft-Hartley, between them, domesticated the revolution that had been taking place on the shop floor in the early '30s, and brought the rank and file under the control of odious bureaucrats like George Meany. The NLRB regime essentially outlawed all the stuff that worked, and left unions with what's regarded today as the conventional strike as their only weapon. But when management no longer sees unions as a useful ally, the conventional strike amounts to a mass resignation. When a union declares a strike these days by the conventional NLRB rules, management reaction is likely to be "O frabjous day! Callooh! Callay!"

Unannounced one-day wildcats at random intervals, on the other hand--and work-to-rule strikes, open-mouth sabotage, boycott and sympathy strikes--these things are a lot harder to resist. Especially when they can be carried out by a union that doesn't bother to jump through all the NLRB certification hoops, but prefers to play by its own rules of what the I.W.W.'s Alexis Buss calls "minorityunionism."

The old manufacturing unions are dinosaurs. Their only interest is in maintaining the privileges of their members in the handful of surviving plants, and being the last to be closed down--and the workers whose plants are already being closed down, and the non-unionized unskilled workers in the service sector, can all go to hell. For that matter, every union local in the country could be decertified, and if Sweeney and his cronies at the AFL-CIO headquarters continued to get their NED money from the government, they probably wouldn't raise a peep. They feel more threatened by rank-and-file challenges to their authority than by downsizing and offshoring. The last union job I had, the by-laws included a provision that nobody belonging to another union not affiliated with the AFL-CIO was eligible to run for any office in a local. I'll give you three guesses who that was aimed at (*cough* two-card Wobblies *cough*), and the first two don't count.

The future lies with service workers, in fast food, retail, hospitals, etc. And the way to victory is not NLRB certification and by-the-rules strikes, but unconventional warfare.

As an individualist anarchist, I should add that I see unions useful mainly as revolutionary weapons against the state capitalist enemy. They are a form of defensive force against organized capital and its state, which have initiated aggression by invading the peaceful sphere of market relations. The need for direct action will disappear as soon as the state ceases to intervene in the market on behalf of landlords and capitalists. Although I am a proud Wobbly, I do not see the free market as something to be transcended by militant unions--but rather, something for them to fight for. "Abolition of the wage system," for me, does not mean an end to the sale of labor (after all, according to Tucker, that labor should be paid is the whole point of socialism); it means an end to state-enforced separation of labor from ownership, and labor's resulting tribute to the owning classes in the form of a wage less than its full product.

There might well be a role for non-radical unions in a genuine free market society, as an ordinary means for ensuring contractual stability and predictability (as Tom Knapp argued), in the interest of both employer and employed. But the main thing is to eliminate the kinds of state intervention in the market which create privilege in the first place, and thereby force workers to sell their labor under conditions of unequal exchange. Do away with the money monopoly (which keeps capital artificially scarce and inaccessible to labor, and forces labor to pay a monopoly price for access to means of production owned by others), and the state's enforcement of land titles not founded in occupancy and use, and labor relations will take care of themselves. The increased bargaining power of labor in such an environment, with jobs competing for workers instead of the other way around, will ensure that labor's wage is its full product, and labor has the last word on its working conditions. Indeed, Gary Elkin claims that such a labor market would result in the transformation of even nominally capitalist-owned enterprises into de facto workers' co-ops.

It's important to note that because of Tucker's proposal to increase the bargaining power of workers through access to mutual credit, his so-called Individualist anarchism is not only compatible with workers' control but would in fact promote it. For if access to mutual credit were to increase the bargaining power of workers to the extent that Tucker claimed it would, they would then be able to (1) demand and get workplace democracy, and (2) pool their credit buy and own companies collectively. This would eliminate the top-down structure of the firm and the ability of owners to pay themselves unfairly large salaries. Thus the logical consequence of Tucker's proposals would be a system functionally equivalent in most respects to the kind of system advocated by left libertarians.

Tuesday, July 26, 2005

Fair and Balanced

It should, two centuries after Adam Smith wrote The Wealth of Nations, be axiomatic that to alleviate poverty, developing economies need to grow faster, and the poor need to benefit from this growth. Trade can play the key role in reducing poverty, because it boosts economic growth and the poor tend to benefit from that faster growth. Yet this is sometimes disputed by anti-capitalism/anti-globalization fanatics who put their ideological values before the needs of the developing world, caring more about opposing capitalist corporate symbols then raising living standards.

No, it should not be axiomatic.

First of all, neoliberals don't even have a clear idea of what "growth" is measuring. I've said it before, but here it is again: A great deal of nominal "growth" probably reflects activity that was formerly unmonetized (in the subsistence, barter or gift economy). As an example, I repeat--once more--the case of British colonial policy in East Africa. The colonial administration evicted the native peasantry from some 20% of the best land in Kenya, and gave it to settlers. At the same time, they imposed a poll tax on the native population to force subsistence farmers into the wage market. I'd guess that the nominal GDP, measured in official currency, probably exploded upwards as a result of that.

Right now Third World cities are similarly being flooded by landless peasants, evicted by landlords acting in collusion with authoritarian governments and Western agribusiness corporations. And they're bidding each other down to almost nothing, competing for sweatshop jobs. Meanwhile, the incomes of the landlords profiting from cash crop agriculture, and of the comprador bourgeoisie getting rich from the sweatshops, are exploding upward. See any parallel?

Conversely, imagine if those same peasants returned to the land that was rightfully theirs, made use of biointensive farming techniques and the kind of intermediate technology that's adapted to decentralized village economies, and met most of their consumption needs bartering in local LETS systems. I'm guessing that official GDP would fall to almost nothing--but the real quality of life would be almost incomparably better.

Second, "trade" as such is neither good nor bad. If there's more of it going on because externalizing the cost side of the ledger on the state makes it artificially profitable, it's bad: it's a form of inefficient, subsidized activity, crowding out more efficient small-scale producers for local markets. If it's genuinely more efficient, even when all costs are fully internalized (as, you know, Adam Smith favored), it's a good thing. My own guess is that there'd be a lot less "trade" if all that trade genuinely took place on the free market, instead of on the government teat.

Whereas anti-globalization zealots are today very much marginalised from the mainstream, a more respectable body of opinion argues that free trade can be economically disruptive and damage livelihoods in the short-term.

This last sentence, if it makes any sense, must assume an unstated minor premise: that "globalization" is equivalent to "free trade." Staines is quite sensible not to make such an assertion explicit, because--as I've already shown--it's utter nonsense.

Monday, July 25, 2005

Come See Us at Our New Location!

No, I'm not abandoning Mutualist Blog--far from it. But I'm not posting anything else here today. I'm blogging over at UnCapitalist Journal. It's an extended ramble on the archives of The Libertarian Forum, newly available online at Mises.Org. If you want the link, come check out the post at my other digs.

Does he [Treasury Secretary O'Neill] not know that the whole IMF-US Treasury carpet-bagging strategy of full-spectrum dominance is based on promoting unproductive government-led indebtedness abroad, at increasingly usurious rates of interest, and then--either before or, more often these days, after, the point of default--bailing out the Western banks who have been the agents provocateurs of this financial Operation Overlord, with newly-minted dollars, to the detriment of the citizenry at home?

Is he not aware that, subsequent to the collapse, these latter-day Reconstructionists must be allowed to swoop and to buy controlling ownership stakes in resources and productive capital made ludicrously cheap by devaluation, or outright monetary collapse?

Does he not understand that he must simultaneously coerce the target nation into sweating its people to churn out export goods in order to service the newly refinanced debt, in addition to piling up excess dollar reserves as a supposed bulwark against future speculative attacks (usually financed by the same Western banks’ lending to their Special Forces colleagues at the macro hedge funds) - thus ensuring the reverse mercantilism of Rubinomics is maintained?

Joseph Stromberg has argued for a very different method of "privatizing" the oil industry. He takes Rothbard's and Hoppe's proposal for privatizing industry in post-communist societies, and applies it to the state-owned oil industry in Iraq:

In the case of capital goods created by the communist states out of confiscated resources, the quickest and least bad solution was the "syndicalist" one of handing over the oil refineries to, say, the oil refinery workers and managers, since in a rough analogy with the homesteading of unowned resources, those workers and managers had mixed their labor with the goods in question.

It wasn't perfect, but it beat funny auctions, that amounted to new expropriations by domestic and foreign investors and, even worse, rested on an assumption of ultimate state title, which pushed aside the whole question of just ownership.[9]

Proposals to auction off Iraqi properties, with the state acting as effective owner, would likely lead, if implemented, to a massive alienation of resources into the hands of select foreign interests.

Thursday, July 21, 2005

Move Over, Grameen: American Microcredit

A blog about creating a more just economy. Topics will include cooperatives, local currencies, family businesses, and political decentralization. My inspirations include David Korten, Duane Elgin, E. F. Schumacher, and Thomas Greco.

There's a great post on a new trend among credit unions: entering the payday lending market. Credit unions are issuing payday loans for a service fee of a couple bucks, as opposed to $20 (an annual interest rate of up to 480%).

Now imagine what might happen if the banking industry were opened up to real competition: if licensing and capitalization requirments, and all other market entry barriers against mutual banking, were eliminated.

Fake Constitutionalism

BOSTON GLOBE - Roberts is a member of the Federalist Society, a fraternity of legal conservatives whose members often espouse the view that the Constitution should be interpreted literally and oppose "activist" judicial decisions that find implicit but unwritten rights in the document -- including the unwritten right to privacy from which abortion rights are derived.

I've got no problem with strict constructionism, if it's sincerely and consistently applied. The problem is that Federalist Society types like Roberts are very selective in their "originalism." They're real sticklers for the Tenth Amendment when it comes to Congressional use of the Commerce Clause to justify economic regulation. But their construction isn't nearly as strict when it comes to things like Presidential "national security" powers and Executive Privilege. Or upholding the Fourth Amendment against Nazi shit like USA Patriot. And for some reason, their scruples against activist regulatory use of the Commerce Clause don't extend to federal drug laws, as Raich indicated (not to mention "tort reform"). When the Commerce Clause can be used to help big business, they support a reading broad enough to drive a truck through.

In other words, they're only against activist government when it might help poor people. The rest of the time, their attitude is "bend over and grease up."

The "Constitutionalism" of the neocons and New Right, like every other aspect of their ideology, is a fake substitute for the real thing: fake "red state" populism, fake federalism, fake "free market" libertarianism, and fake small government conservatism. They're a statist borg collective, concealing themselves like pod people behind a facade of traditional Main Street conservatism.

Wednesday, July 20, 2005

Upaya has a good post up, partly in response to my earlier one on the potential for green "tax shifting" and cuts in corporate welfare as the basis for a Libertarian-Green coalition.He proposes a more general left-libertarian coalition of agorists/left Rothbardians, geolibs, and mutualists like me, centered on the following agenda:

Like freeman, who left a message in the comment section, I am extremely leery of the idea of a citizen's dividend, although it would certainly be an improvement over the existing welfare state bureaucracy. But I guess if you start with the socialization of land-rent on Georgist principles, it's better to return it to the public as a dividend than spend it on stuff that should be funded with user-fees.

Freeman supports, as an alternative,

the dismantling of the state from the top-down, which is what you seemed to describe by saying that government help for the poor should be the last to go. Corporate welfare and other forms of privledge for the wealthy need to be axed first.

Disparities in wealth would also be greatly reduced by an individualist anarchist system of land tenure, based on occupancy and use. Millions of renters would become owners of their homes, and cease paying hundreds of bucks a month in what amounts to a tax to the absentee landlord. A left-Rothbardian program of worker control of state capitalist industry would have a similar effect. Had labor not been dispossessed of the means of production, there would have been little need for a welfare state in the first place.

The Democratic Freedom Caucus has moved to a new blog site, Freedom Democrats. The DFC, in case you don't know, is a libertarian caucus in the Democratic Party. Among other distinguishing features, it's sort of pseudo-, quasi-, crypto-Georgist.

(I probably shouldn't use the G-word, because it always gets me in trouble. The DFC isn't officially Georgist, and not all its members consider themselves Georgists. But a majority of DFC members probably believe that "land is different," in some sense, because "they're not making any more of it," and that economic rent on land is different from the returns on labor and capital. And most probably agree with the classical liberals that a tax on site-rent is the least burdensome and unjust form of taxation. To the average layman, "Georgist" is probably as good a shorhand term as any for that cluster of beliefs.)

A lot of DFC members like the term "Jeffersonian Democrats," alluding to a sort of nineteenth century decentralist libertarianism that's not just a poorly disguised apology for big business interests. Here's how one member put it in a press release a couple of months ago:

"We advocate tax cuts and ending welfare," says Thomas Knapp, 38, of St. Louis, a member of the new DFC affiliate. "But we tend to favor cutting taxes from the bottom up instead of from the top down, and to place a higher priority on ending corporate welfare than on ending the food stamp program for the working poor."

Tuesday, July 19, 2005

The Security Society vs. the Skeptical Society

Adem Kupi has a great post up at A Pox on All Their Houses. There's a lot of stuff in here related to the increasing stabilization costs of centralism and large size, but it's difficult to summarize. Just read it.

The current growing ratio of noise to signal is putting pressure on the world to become more skeptical, which will put pressure on societies to shift away from guaranteeing security. They just won't be able to do it effectively. The idea of managing anything larger than a local area will become preposterous. Our current states will collapse, or kill us all in the process of trying to hold themselves together. When it becomes clear that the rulers will only be ruling a pile of rubble if they continue, they will be forced to retreat.

I was just reading Leopold Kohr's The Overdeveloped Nations, and he compared large organizations to large buildings. The larger the skyskraper, the more of its floor space is occupied by elevators, and the smaller the portion of the building's total area is left over for the functions for which it was designed. Eventually, if a building were made tall enough, the whole thing would be taken up by elevators and air conditioning.

He analyzed the growth of the American GNP over the previous few decades, and found that almost all of that new output was taken up by a geometrical increase in the amount of electrical power, etc., necessary to keep things running. And in the process, the threshold of subsistence was rising so that the average person had to work ever-longer hours just to maintain what was socially defined as a barely acceptable standard of living.

As Paul Goodman put it forty years ago, decent and comfortable poverty is being rendered impossible. The state's subsidies to centralized and "professionalized" ways of doing things crowd out decentralized alternatives, and render us less able to translate our own labor into use-value outside the corporate economy. Subsidies to suburban sprawl make feet and bicycles less usable, so that we have to own a car. And the cartelized auto industry, by incorporating more and more computer technology and other expensive bells and whistles into new cars, has made it impossible to rely on shade-tree mechanics. The drug patent system and the licensing cartels crowd out cheap forms of medicine with the most expensive new stuff, so the only way to get what society defines as adequate healthcare is to find a liege-lord (er, employer) who will pay for it. Building codes render almost impossible the kinds of self-built housing that were in common use as late as 1940.

Monday, July 18, 2005

Studies in Mutualist Political Economy: Available Again

The latest printing of Studies in Mutualist Political Economy just arrived. I'll get the existing backlogged orders in the mail first thing tomorrow. My apologies for the wait to everyone who sent in orders in the meantime.

Given that pharma has been the most profitable sector in the US economy for most of the last quarter century, and given that - to give some perspective - they spend less on R&D than on marketing or on profits to shareholders, their claim that free trade would affect their R&D makes no sense. All they are trying to do is protect their profitability. As one Pfizer vice-president has explained, profit is the sole reason drug companies oppose free trade in drugs.

When you also note that drug companies are heavily reliant on government-funded research for many of their most innovative, most socially-important new drugs, one thing becomes clear: the economic system the research-based drug companies support today is not the free market. It is statism.

In the past, I have pointed out that drug companies spend more on marketing and profits than on R&D. I am not trying to make the argument that marketing and profits are, in and of themselves, bad - both have an important social function. I state this simply in order to help people get some perspective about the cost of R&D as percentage of their turnover....

Prof. Donald Light is a Professor of Comparative Health Care Systems at the University of Medicine & Dentistry of New Jersey and a member of George W. Bush's Presidential Business Commission....

The figures he uses say that the investment by drug companies in R&D is 11.8% of turnover, but this goes down to 7.1% when you deduct taxpayers' contributions. Bear in mind that Microsoft invests 17.3% of its turnover on R&D even though an IDC study says that 36% of software is pirated.

In their campaign against free trade in pharmaceuticals, drug company lobbyists repeat the claim that it costs $802m to develop a new drug. This figure has been completely discredited. Principally, the problem is that the study behind the figure (which, of course, was funded by drug companies) takes a subset of very expensive new drugs, rather than new drugs in general. Many people have attacked the study because half of the cost is the opportunity cost of doing other things. Prof. Light says the average costs for all new drugs - not including opportunity cost - is less than $100m.

So the average cost of developing new drugs is a lot less than drug companies claim. But the most important fact comes when you look at drug company profits. Drug companies have been in the most profitable US industry sector each year for most of the last quarter century. They enjoy profits three to four times the Fortune 500 average. If their profit margins were below average, then they might have a point.

By the way: the current healthcare model, based on the highest-cost patented medicines, has some opportunity costs of its own. Between them (as I've argued in the past) the drug patent system and the medical licensing monopolies collude to crowd out lower cost alternatives, and to criminalize a lot of what Schumpeter called "product substitution." A lot of existing knowledge is underutilized, and crowded out by conventional models of treatment, because they're not as lucrative as patented drugs.

Anyway, this just goes to show that some caution should be exercised in banishing anyone to the outer darkness.

Sunday, July 17, 2005

Carnival of the Uncapitalists, Homage to Catalonia Edition

Well, it's that time again--the fifteenth installment of Carnival of the Uncapitalists. But this time you need click no further, because I'm the host. Since Tuesday is the anniversary of the 1936 Spanish workers' uprising, the theme for this edition is workers' autonomy, worker control of the production process, the bargaining power of labor, and suchlike.

To start off, we've got a new contributor, Dmytri Kleiner, with a post at Interactivist about his intriguing idea for venture communes. The idea of venture communism is to enable labor to mobilize its own land and capital, use them more efficiently than the corporate capitalists, and watch the massive amounts of land and capital currently in the hands of capitalists become near-worthless when they're starved for labor to work them.

Richard Chappell of Philosophy, Etc., has an interesting discussion of negative versus substantive freedom, and the effect of a guaranteed income on the bargaining power of labor.

Nathan Newman has a good post up at TPM Cafe scrutinizing the much-ballyhooed "moderate" credentials of Sandra Day O'Connor when it comes to workers' rights.

Last but not least, Charles Todd of Freiheit und Wissen--the guy who got this uncapitalist thing going--exposes the thuggery of the so-called "free trade" neoliberals, and the jackboot to the face that workers in Haiti are getting.

One thing that many good, honest people do not understand: the majority of rhetoric about “free markets” is baloney. You can tell it is baloney because there is a gap between what the preachers of “free market” ideology tell you and what they actually do.

This is a very simple principle. If someone always tells you that you ought to do x and then always does y instead, they have a credibility gap...

For example, “free market” ideology will tell you about the ability of free markets to set the cost of labor. I hear this thing all the time from Republicans and Democrats alike. Governments shouldn’t intervene, the market knows best, etc. etc. Yet despite this high praise for the power of the market to establish wages, governments and corporations continually intervene by force and intimidation to artificially suppress wages.

Haiti is just one particular example where the use of force and intimidation helps keep wages low so U.S. business interests can keep profits high.

Thursday, July 14, 2005

On the Superior Efficiency of Small-Scale Organization

I recently posted on the diverse, decentralized economy of the Emilia Romagna region of northern Italy. Now Eugene Plawiuk writes on a similar theme about Africa.

The real source of economic development in this region is not large scale farming but collective farming of small villages and family farmers. In particular women, who have developed intervillage cooperatives such as in Senegal....

These small scale operations are environmentally sound, and provide an alternative market model to the usual large scale Agribusiness operations of Imperialist companies from Europe and America, such as Cadbury or Archer Daniels Midland (ADM).

They allow for value added production, for democratic input into production needs, and for the continuance of viable village life, saving cities from becoming large scale refuges of the unemployed.

I watched a program on BBC on the UN Report and it showed direct economic democracy being practiced by women and men farmers in Senegal, the farmers are also unionized.

They need to have micro credit and direct economic aid, that they are not getting now, real investment in production. This form of free market economy, developing a viable acriculture for export that is sustainable can only happen with recognition of the collective values of the farmers and their villages.

It is this form of collective capitalism ( or self managed cooperative capitalism as Kevin notes in the comments below..ep ) that will save Africa from its economic downslide, and provide an ability to challenge the environmental disasters it faces from the failed attempts to introduce large scale, fertilizer based, agribusiness operations....

Western models of monopoly cpaitalism do not work in these communities, and are in fact detrimental to sustainable agriculture, mining, forestry, and industrial production. If we really wish to end poverty and support sustainable market development then the mutual aid model of anarchism, the free association of producers, worker and comsumer coops, must be given access to both capital and markets.

The local economies Eugene envisions have a lot in common with the ideas of writers like Kirkpatrick Sale, Barry Stein, Lewis Mumford, and Jane Jacobs (just to name a few).

In Human Scale, Kirkpatrick Sale wrote that even a village of 500 could be almost self-sufficient in terms of food and energy systems, and carry on a few light manufactures. A federation of such villages would provide an adequate local market to make full use of production facilities in textiles and apparel; lumber and wood products; furniture and fixtures; paper; soap, toiletries, and cleansers; stone, clay, and glass products; primary metal industries; fabricated metal products; machinery; electrical and electrical equipment; motorcycles, bicycles, and parts.

According to Sale, virtually all manufacturing could be for local markets of ten thousand or fewer. Of course, there would have to be some change in methods. For example, such small-scale local production couldn't accommodate dozens of product differentiations, or frequent model changes, or purely cosmetic features. There would probably be a great deal of Ford's dictum: "They can have any color they want so long as it's black." But there'd be a lot less of that sort of thing anyway, if manufacturing weren't dominated by a handful of cartelized firms in each industry that could maintain a common institutional culture between them and limit price competition between themselves.

Both machines and factories would be flexible and multi-purpose. The machines, for example:

...for limited markets the installation of multipurpose tools and assemblies can be far more efficient and economical.... A boring machine, for example, that can rout out a small wire or a copper tube can be used to form a drain pipe or a sewage line, if it is retooled with a simple increase in scale; a lathe that can form a nail or a screw can be used for bigger tools and machine parts.

He cited Murray Bookchin's Post-Scarcity Anarchism on the use of such multi-purpose machines to meet the full range of local needs without requiring a large amount of overbuilt, underused production facilities. There's also a lot of material in Kropotkin's Fields, Factories, and Workshops that foreshadows such an economic model.

On multi-purpose factories: Sale began by quoting Ralph Borsodi from his Mother Earth News interview, saying that two-thirds of the manufactured goods we consume could be produced most economically on a small scale.

But Adam Smith completely overlooked what factory production does to distribution costs. It pushes them up. Goods cannot be manufactured in a factory unless raw materials and fuel and workers and everything else are brought there. This is a distribution cost. And then, after you've put together whatever you're making in that plant, you've got to ship it out to the people who consume it. That can become expensive too. Now I've produced everything from tomato crops to suits of clothing which I've hand spun on my own homestead and I've kept very careful records of every expense that went into these experiments. And I think the evidence is pretty clear that probably half to two-thirds-and it's nearer two-thirds-of all the things we need for a good living can be produced most economically on a small scale . . . either in your own home or in the community where you live. The studies I made at Dogwoods-the "experiments in domestic production"-show conclusively that we have been misled by the doctrine of the division of labor. Of course there are some things-from my standpoint, a few things-that cannot be economically produced in a small community. You can't make electric wire or light bulbs, for example, very satisfactorily on a limited scale. Still virtually two thirds of all the things we consume are better off produced on a community basis.

Sale challenged Borsodi's last qualification on light bulbs and wire. General, multi-purpose production facilities, with a few dozen workers at most, could make a wide range of allied products with minimal retooling. For example, the same factory might finish a production run of light bulbs in a few months, and then switch to wiring or other electrical products. A machine shop making light electric vehicles might switch from tractors to reapers to motorized bicycles. Such frequent switching from one production run to another "would never be quite as cheap and efficient as straight-through mass production, of course," but (taking drastically reduced distribution costs into account) would probably still be cheaper overall.

Such an economy would also rely much more heavily on recycling and repairing. Sale described neighborhood recycling/repair centers for putting back into service the almost endless supply of appliances currently sitting in closets or basements, as well as "remanufacturing centers" for (say) diesel engines and refrigerators. Such activity is currently artificially expensive compared to buying new appliances, because the handful of firms in a cartelized industry collude in maintaining an institutional culture that focuses on underproducing spare parts and discontinuing them quickly. In addition, patent laws prevent outside firms from specializing in cheap production of the spare parts necessary to keep other firms' appliances operational. The production model in Sale's economy would focus on high quality, repairability and durability, rather than planned obsolescence.

There would also be greater substitution of local raw materials, and greater local ingenuity, tinkering by the workforce, etc. These last two things tie in with themes in the work of Jane Jacobs and Barry Stein. Jacobs wrote, in The Economy of Cities, of local prosperity depending on the inventiveness of a local population in devising new "product substitutions," finding creative new uses for local raw materials, ways to recycle scrap, ways for one firm to make good use of the byproducts of another in its production process, etc.

Stein wrote, similarly, on the role of an engaged workforce in the innovation process (Size, Efficiency, and Community Enterprise). Most improvements in productivity result from the cumulative effects of small improvements, rather than great inventions. And incorporating such small changes into the production process is often sufficient to permit an older plant to produce almost as efficiently as a new one. Most important, the cost of such changes is comparatively small.

Further, Stein went on, the main source of such incremental innovation is responses to perceived need, rather than technical opportunity. And who's in the best position to perceive those needs? Why, the workers!

It has already been noted that much of the technological progress within a firm is the result of a series of small innovations. This point can be made more generally. The primary source of all innovations is derived from recognition of a need, rather than from technical opportunity.... Such recognition of a need, whether within the firm or with respect to the outside market, becomes possible only under conditions in which workers... are more generally knowledgeable about the organization, its operation, and its relationship to its environment....

Later, he added,

...it is clear that those directly engaged in an organization, whether economic or not, are the most informed about its operational characteristics, are in the best position to implement internal options, and are the most directly (in many cases, the only ones) affected by the organizations' structure, roles, work arrangements, and styles.

This explains the skyrocketing of productivity not only in worker-controlled firms like those in the anarchist areas of Spain, but even in more modest experiments in worker self-management in capitalist enterprises. Work units felt a sense of ownership of the process, and no longer had to submit improvements in the process to an "employee suggestion box," to migrate up twenty echelons of hierarchy.

But of course, such experiments in capitalist enterprises seldom last very long, for obvious reasons. As Stein explained in a footnote to the passage above,

The basic point here is, of course, widely agreed to in principle if not in practice. Decentralizing decision-making to include those who possess the most relevant information and who are in the most direct position to implement decisions and gain feedback as to their effect is standard operating ideology, even though the practice is rarely applied s consistently as it could be and should be. The literature on participation (industrial democracy) is replete with examples indicating the benefits from such a strategy. It is equally clear that the reason more such ideas are not implemented has to do with control preferences and power issues rather than operating efficiency.

No shit, Sherlock. For examples, just check out the "Coventry System" in England, recounted by Seymour Melman in Decision-Making and Productivity; and Volvo's experiments in self-managed work teams, and the "pilot program" at G.E., described by David Noble in Forces of Production. In every case, despite spectacular increases in productivity and declines in scrap rates, absenteeism, etc., the management discontinued such experiments in panic.

More often, management simply pays lip service to the latest management theory fad du jour, which supposedly stresses worker empowerment, while continuing to practice Taylorism in actual fact. I used to work in a hospital that brought in outside consultants to talk about Deming and "quality circles" and similar bullshit out the wazoo. There were three separate offices, side by side, with the word "Quality" in the job title on the door. Here's the funny part: most of the problems they sought to address (patient falls, hospital-aquired infections, medication errors, etc.) were the result of deliberate under-staffing. Shit happened because people working on the floor didn't have time to slow down, notice things, or think about what they were doing. But management's "solution" was to do everything but increase staffing: more "incident review" committees doing "root cause analysis," more "process improvement committees," more tracking forms for us to waste time filling out, more agitprop handouts ("Hey, you stupid people! Don't you know you're supposed to wash your hands?"), ad nauseam. On a week day, there were probably more middle management people sitting in committees thinking up new ways to interfere with our jobs, than there were nurses providing direct patient care.

All management theories, no matter how theoretically empowering, translate in practice into Taylorism. That's because they're implemented by bosses! Duh! If a corporation's management adopted Jeffersonianism as its management philosophy, it would ignore all the stuff about local self-government and just keep the part about screwing your slaves.

Barry Stein also wrote on the flexibility of local economies in responding to consumer demand. John Kenneth Galbraith's "technostructure," with its need for predictability and control, guaranteed demand, and suppression of market fluctuations, is actually the result of artificially large size and capital-intensiveness. Small, local firms, serving local markets, can respond much more effectively to changes in local demand.

Clearly, if firms could respond to local conditions, they would not need to control them. If they must control markets, then it is a reflection of their lack of ability to be adequately responsive. But ultimately, this question hinges on the other aspect of Galbraith's thesis; namely, that without the present large scale and control, important goods will simply not be able to be produced....

....[I]t can be shown easily in information theory that the feedback--information linking the environment and the organization attempting to service that environment--necessarily becomes less accurate or less complete as the rate of change of the data increases, or as the number of steps in the information transfer process increases.

The "turbulence" that Galbraith wanted to suppress increases with organizational size and the number of interconnections within the organization.

Rather than top-down control to accommodate large size, the solution is to integrate the organization more closely with the environment it serves.

This problem is to be solved not by the hope of better planning on a large scale..., but by the better integration of production enterprises with the elements of society needing that production.

Under conditions of rapid change in an affluent and complex society, the only means available for meeting differentiated and fluid needs is an array of producing units small enough to be in close contact with their customers, flexible enough to produce for their demands, and able to do so in a relatively short time.... It is a contradiction in terms to speak of the necessity for units large enough to control their environment, but producing products which in fact no one may want.

There is another facet to this superior matching of supply and demand in a local market. It helps to insulate the local economy from the fluctuations of the business cycle. Marx wrote that the only way an economy based on commodity production and market exchange could exist without a destructive boom-bust cycle, was if producer and consumer were closely connected in a local economy. But he dismissed this contemptuously, along with Proudhon's "petty bourgeois socialism," as possible only in a primitive artisan economy.

Of course, Marx (and even more so his technocratic followers like Engels and DeLeon) greatly exaggerated the importance of economy of scale, treating it as virtually unlimited.

And in fact, it's a matter of degree. The more closely the producer is connected to the consumer, the more reliable and predictable his market is. Starting at the smallest possible level, imagine a small truck farmer who lives next-door to a plumber. If they exchange their services, the farmer still won't be able to dispose of enough of his produce to earn a living, and the plumber won't do enough plumbing for the farmer to support himself. But each will have a secure and predictable source of all his vegetable and plumbing needs, as well as a reliable outlet for the portion of his product consumed by the other. The more people you bring into the barter system, the larger the share of each member's output has a dependable market, and the more of his own needs he can meet through the barter system without fear of periodic unemployment or a boss' whims. At the scale of a community of 10,000, the fluctuations and uncertainty will be somewhat greater. But most production will still be based on a fairly stable and predictable pattern of demand for a known local market, and probably for retail outlets with which the producer has relationships of long standing. The local economy will not be subject to the severe fluctuations of anonymous commodity markets on a national scale, or to the cycles of the national credit system.

Lewis Mumford also wrote a great deal on the flexibility and adaptability of decentralized economies. For example (in The Pentagon of Power), his idea of the "technological pool," characteristic of "polytechnic" economies:

Similarly [to a gene pool], one may talk of a technological pool: an accumulation of tools, machines, materials, processes, interating with soils, climates, plants, animals, human populations, institutions, cultures. The capacity of this technological reservoir, until the third decade of the nineteenth century, was immensely greater than ever before: what is more, it was more diversified--and possibly quantitatively larger, as well as qualitatively richer--than that which exists today. Not the least important part of this technological pool were the silled craftsmen and work teams that transmitted the colossal accumulation of knowledge and skill. When they were eliminated from the system of production, that vast cultural resource was wiped out.

This diversified technological assemblage not merely constituted economic security: it permitted a continuous interplay between different phases of technology; and for a time this actually happened.

As examples of such creative cross-pollination when different "phases" of technology coexist, he mentioned "the altered cut of mainsail and jibs in modern sailing vessels," applying modern mathematical engineering analysis to a very old technology. One might also look at the applications of twenthieth century science to organic gardening by people like Robert Rodale and John Jeavons, and the integration of modern "intermediate technology" (see also here) into a subsistence lifestyle.

There was no reason whatever to make a wholesale choice between handicraft and machine production: between a single contemporary part of the technological pool and all the other past accumulations. But there was a genuine reason to maintain as many diverse units in this pool as possible, in order to increase the range of both human choices and technological inventiveness. Many of the machines of the nineteenth century, as Kropotkin pointed out, were admirable auxiliaries to handicraft processes, once they could be scaled, like the small electric motor, to the small workshop and the personally controlled operation.

Indeed, Kropotkin wrote, in Fields, Factories and Workshops, of the radical decentralizing potential of electrical power sources no longer tied (like steam engines and water mills) to large water sources. Had not organized capital and its state stood in the way, that's the way things might have happened.

More generally, as radical industrial historians have shown us, available production technologies at any given time are amenable to both libertarian and authoritarian uses. Chesterton and Belloc wrote of the liberating paths the industrial revolution might have taken had it taken place in a society where the enclosures and the suppression of the town communes had never happened; industrial techniques and eventually steam production might have been incorporated, piecemeal, into a system of artisan production and subsistence farming.

Mumford himself wrote, in quite Chestertonian terms:

There was a moment at the beginning of the sixteenth century, before the new power system, exemplified in capitalism and colonialism, had taken form, when it might have seemed that a new order was taking form, in which the older modes of polytechnics would be reconstituted and reinforced by the contributions of a science-oriented technology.

It's still not too late. In fact, when state capitalism finally runs its course, and its crises of inputs outstrip the state's ability to subsidize it, such decentralized alternatives may well be what save us.

Wednesday, July 13, 2005

Better an Honest Enemy....

I was just reading a comment about "liberals" who were glad that the Supreme Court had overturned med-pot laws, because otherwise they might have undermined the broad intepretation of the Commerce Clause that the "progressive" regulatory state depends on. [Note--Drizzten quotes many nauseating examples of liberal relief over the Raich decision] Well, I hope the Devil is stoking the coals to make an especially hot place in Hell for them. They'd rather live under fascism than risk losing control of the welfare-regulatory state. They're like the Communists in Madrid, who preferred losing to Franco over sharing a victory with anarchists. Shit, if Bush proposed suspension of habeas corpus and slave labor detention camps for "subversives," people like Reid would probably just demand that the guards have civil service protection and be unionized under AFGE locals.

The Nation's Kristina Vandenheuvel appeared on a talking head show immediately after 9-11, and gloated that "the era of big government is back," exulting that Americans were over their unfortunate distrust of the government. Thirty years ago, in "The Crisis of Democracy," Samuel Huntington was lamenting that the post-Watergate level of distrust of government made the public ungovernable, and prevented the power elite from having the free hand it needed to run this country without interference. Nice that he and Vandenheuvel have something to agree on. Saves time trying to tell the men and the pigs apart.

If I could have gotten my hands on her at that moment, I believe I would have cheerfully taken her apart one piece at a time.

When the partygoers denied throwing bottles, Laverriere said, the officers became angry, prompting him to pick up a friend's camera and start videotaping. Laverriere told the Globe that Officer Jorge Orta ripped the camera from his hands and threw him to the floor, injuring his shoulder.

Members of Copwatch have experienced similar police reactions to being videotaped, sometimes being charged with "obstructing police work."

Which makes me wonder: why would cops have such a problem with being videotaped? After all, if they've done nothing wrong, they've got nothing to hide. At least, that's what they tell us every time they wipe their asses on another part of the Fourth Amendment, or claim that our "reasonable expectations of privacy" don't extend to warrantless dog-sniffing or infrared surveillance in our own homes.

Reformists have been accused of sacrificing long-term goals to short-term expediency, and revolutionaries, on the other hand, have too often sacrificed the concerns of today to a vision of tomorrow. Building a revolutionary strategy means/implies thinking about how our short-term, medium-term, and long-term activities are linked, as what we do today influences what we do tomorrow....

-Maintain a two-tiered political philosophy. One may cater to an anti-state view of the world. But the other must be a theory of the State. It would acknowledge that tax-funded interstate highways, public universities (with their basketball teams and all), and public broadcasting (with Big Bird and Lake Wobegon and all) are not going to go away. If the State is inevitable, what should be its purpose and how should it be managed?

Morgan goes on, in his Northeastern Anarchist article, to describe how dual power (the creation of grass-roots, alternative social institutions) can not only prevent a post-revolutionary society from degenerating into state socialism, but lay the groundwork for a future society today.

....In the chaos that often follows revolutions, so-called revolutionary groups have generally re-created the institutional life of the "Old Regime".

Abstract promises of a grand liberatory revolution are simply not sufficient.....

....The compelling force of a lifetime of direct experience with authority suggests that authority is necessary, although unpleasant.... It is noteworthy, in this context, that a study of attitudes towards workplace democracy found that for both managers and workers the single greatest predictor of support for workplace democracy was experience with workplace democracy. Why? Because people who have experienced workplace democracy have had the experience of democratic workplace relations actually working.... The only thing that can puncture the hegemony of dictatorial workplace ideologies is concrete, material, living proof of democratic workplaces, and practical experience with these modes of organizing....

If anarchists can actually show people that self-management works, then we can be taken seriously when we agitate for a self-managed society.

However, beyond the "propaganda value" of dual power organizations, dual power is an essential element of going beyond an insurrectionary politics, towards a more broadly revolutionary politics. Beyond practically demonstrating that self-management works, building dual power organizations is valuable because it begins to develop the infrastructure of the revolution, to create the active capacity for self-management....

Social structure and organization are both crucial because an industrial society requires a high degree of coordination, which involves a great deal of complex organization. In every insurrectionary moment that we can observe, chaos and difficulties centering on issues of coordination were acute in the opening phases of the revolution. In each case, purportedly revolutionary juntas recreated the institutional structure of the "Old Regime". As deeply flawed as the "Old Regime" was, as much as these groups railed against it, they re-created it because at least it got things done.... Unless revolutionaries have practical solutions, and have already begun to be able to provide revolutionary means of re-organizing social life, in all of its concrete details, chaos will ensue the insurrection. In general, in times of uncertainty people naturally fall back on what they know, their sense of "how things get done"....

The withdrawal, or retreat, of the State from the public sector opens up the space for the creation of dual power, the organization of an autonomous, community-based public sector that is organized according to principles of self-management, an anti-State public sector.

It is difficult to understate the revolutionary effect of organizing to create, and support, self-managed community services. There are even examples of this in North America— the Black Panther Party, at their strongest, ran over 60 social programs, such as schools, meal programs, and shoe programs.... In the case of the Spanish anarchist movement in the 1930’s, part of their strength relied upon the mutual aid societies, schools, and workers’ centers that they organized. Indeed, a not insignificant proportion of the literate working class was educated in anarchist schools in Spain in the 1920’s and 1930’s. It should come as no surprise that after the Spanish revolution/civil war broke out, anarchist schools flourished—anarchists had a great deal of experience at organizing and running schools.

By advancing where the state has retreated, by beginning to create a community-based, self-managed, anti-State public sector, anarchists can begin to generate a broad-based movement that has the organizational capacity to create a fully self-managed society....

Morgan concludes his article with some unfortunate remarks about markets:

Unfortunately, anarchist attempts to create "dual power" through the creation of cooperatives often create what might be termed "market syndicalism". While these cooperatives are internally self-managing, they exist as units in a market economy, they still rely upon access to the market. Building an autonomous public sector begins to develop the practical revolutionary infrastructure to make not only the State, but also the market irrelevant in social life.

So what the hell's wrong with markets? Apparently Morgan conflates them with capitalism. I've seen arguments in the past that producers' co-ops will inevitably take on a capitalist character because of the imperatives of market competition. But that's a mighty big extrapolation to make from the observed behavior of cooperatives in the present state capitalist economy. The "market" to the extent it exists today, is allowed to operate in the interstices of a fundamentally statist system, to the extent it serves the interests of a state capitalist ruling class. The dominant organizational style in the state capitalist economy is defined by the giant corporation. Cooperatives, in effect, are islands in a state capitalist sea, hamstrung by a capitalist finance system and competing against state-subsidized and state-cartelized giant corporations.

And there's not exactly a glut of empirical evidence on the emergence of an exploitative economy from a cooperative free market, without the help of a state imposing a capitalist revolution from above. Despite all Engels' trash-talk in Anti-Dühring (a lot of it politically motivated back-tracking from Marx's writing on primitive accumulation), capitalism--the divorce of labor from ownership--did not emerge naturally as a result of the "winners" and "losers" in free market competition. As Martin Luther King said, when you see a turtle on a fence post, you can be pretty sure he had help getting up there.

A true free market, with a decentralized economy of small-scale manufacturing for local consumption, would be fundamentally different. A much larger share of the workforce would be cooperatively or self-employed. And in the absence of state banking laws designed to keep capital inaccessible to workers and force them to sell their labor on disadvantageous terms, the increased bargaining power of labor would result in even nominally absentee-owned firms becoming de facto producer co-ops. The financial system and distribution networks, likewise, would be cooperative in nature. In short, it would be a cooperative sea; and whatever capitalist enterprises managed to survive would find themselves to be the shrinking islands in a hostile sea, as cooperatives are now.

A market is nothing but the absense of coercion, an environment in which producers may peacefully exchange the products of their labor. And in the absence of state enforcement of special privileges, that enable owners of land and capital to draw artificial scarcity-rents on the means of production, all exchanges would be exchanges of labor. Since nobody is born with a claim to somebody else's labor-product, I'm hard-pressed to understand how "anti-market" people think labor-products would be distributed, except by voluntary means of gift or exchange. Any society in which individuals and work-units have full disposal of their product will be a market society, unless voluntary exchange--free market activity between consenting adults--is forcibly suppressed.

Carnival Submissions

Since it's the day before July 19, the anniversary of the Spanish workers' uprising in 1936, I thought a good theme would be anything related to worker involvement in the production process: worker autonomy, self-management, bargaining strength, direct action, etc.

If you're interested, check out the Submission Guidelines and email your submission to either uncapitalist@gmail.com or kevin_carson@hotmail.com The deadline is 3pm Sunday.

Monday, July 11, 2005

Putting Monica Lewinski to Shame

I know that the freest and fairest societies are those with a free press . . . publishing information that the government does not want to reveal.

The problem is, she's made a career regurgitating information that the government did want to reveal. But never mind her prewar actions as a conduit for Chalabi and the Rumsfeld group. In the case in question, the government was attempting to leak information against its political enemies. She's not protecting a leaker against the government--the leaker represented the very highest levels of the government. She is currently engaged in the moral equivalent of covering for an employer that tried to blacklist a whistle-blower; yet she wants to portray herself as Socrates before the Assembly. That dog just won't hunt.

Anyway, as Jim points out, this is the same Judith Miller who wrote the following, not too long ago:

. . . my job isn’t to assess the government’s information and be an independent intelligence analyst myself. My job is to tell readers of The New York Times what the government thought about Iraq’s arsenal.

This is nothing new. Judith Miller has been a shill for the national security state going back way before the Dumb W. Ass administration. Her kneepads-and-warm-washcloth approach to recycling government war agitprop has been quite consistent, under both Clinton and Bush. (Via Alphonse van Worden) Truthout reproduces a talking head show transcript from 1999, in which Norman Solomon tears her a new one for fellating the Clinton administration during the Balkan war.

And--a definite "howler of the week" candidate--my local "newspaper" editorialized on Sunday that the jailing of Miller was an attempt to turn a journalist into a mouthpiece of the government. Seems to me like she didn't have very far to go.

My only fear is that some honest street prostitute might be forced to share a cell with her.

Interesting Cooperative Site

There's a lot of good stuff on cooperatives at Zvi Galor's site. Some of the most interesting articles are on an Israeli institution called the Moshav. It's a village cooperative which uses the joint credit of the entire village to obtain loans for production inputs, and then markets the output cooperatively to pay off the loans.

The nexus between producers' cooperatives, cooperative credit, and consumers' and marketing co-ops is probably the single most important area for analysis for explaining why cooperatives degenerate into conventional capitalist enterprises when they don't exist within the larger framework of a cooperativist support network. It's also the key to envisioning what kinds of larger structures are necessary for cooperative economy to develop as a system, and to lay the groundwork for supplanting capitalism with a genuine free market.

Sunday, July 10, 2005

Followup: Libertarian-Green Tax Reform Alliance

In the comments on the Libertarian-Green Tax Reform Alliance thread, Matthew supports in principle the use of "green taxes" as a mechanism for forcing polluters to internalize costs, but raises the question of how the value of pollution damage can be assessed.

One partial answer is Bill Green's: front-load the process. Pollution is itself an externality of subsidized resource consumption. By charging fees for the use of natural resources in the first place, we can encourage producers to use them economically, and thus minimize pollution at the same time. The pricing issue is settled, in the case of renewable resources like aquifers, woodland, etc., by auctioning off permits based on the sustainable yield.

Another possible answer is civil liability, imposed by local juries, as a pollution "tax." Here's an interesting link to Elizabeth Brubaker's Property Rights in the Defense of Nature, which Terry Burgess of the LeftLibertarian yahoogroup directed me to. The book is online at the Environment Probe website. Enviroment Probe emphasizes "putting... market mechanisms to work for the environment."

Central to its work is the promotion of property rights and decentralized decision making to empower individuals and communities to protect natural resources. It is also a sharp critic of subsidies to resource industries.

Green Scissors is also a group worth looking into; they're dedicated to eliminating subsidies and preferential tax breaks for the consumption of resources.

Carnival of the Un-Capitalists

Friday, July 08, 2005

Report from Emilia Romagna

Ecodema reproduces an interesting report by Dan Swinney of the Center for Labor and Community Research, on the Emilia Romagna region of northern Italy. In the 1940s, it was among the poorest areas in Italy. Here's a description of the region today, from Bob Williams of the Van City Capital Corporation in Vancouver:

There are 90,000 manufacturing enterprises in the region, surely one of the highest densities per capita in the world! Small, medium, enterprises (SME’s) predominate. One person in twelve is self-employed or owns a small business. In recent years the region has produced the highest GDP per capita in the country, and it now ranks with the ten best in Europe…2/3 of the citizens of Bologna belong to a co-op…45% of the GDP is produced by co-ops…(and) 85% of the social services in Bologna are delivered by co-ops…

Among the fascinating bits of information in Swinney's report:

Some of Emilia Romagna’s manufacturing companies that are world class high performance companies are cooperatives. Other private companies and cooperatives work together in flexible networks that combine a number of smaller firms into joint projects. And government has played a powerfully positive role in creating sector-based service centers that assist smaller companies in being competitive in the global economy;

Coop Italia is the top retailer surpassing giants like the French equivalent of Wal-Mart—Carrefour—in sales. It has 6 million owner/members, 55,000 employees, 1,200 stores, and €11 Billion in sales;....

The cooperatives have their own huge insurance company—Unipol, large investment funds such as Coop Fund to provide loan and equity to start-up companies, and very sophisticated support organizations such as Lega Coop that provide a full-range of technical, educational, and financial services to insure the success of cooperatives;

“Social Cooperatives” provide various services to the mentally and physically disabled—“privatizing” what historically were state services but to cooperatives that are frequently preferred by professionals because they permit creativity and the delivery of high quality services and work experience for the disabled....

Rothbard on Feudalism and Land Reform

Let us say that Ruritania is ruled by a king who has grievously invaded the rights of persons and the legitimate property of individuals, and has regulated and finally seized their property. A libertarian movement develops in Ruritania, and comes to persuade the bulk of the populace that this criminal system should be replaced by a truly libertarian society, where the rights of each man to his person and his found and created property are fully respected. The king, seeing the revolt to be imminently successful, now employs a cunning stratagem. He proclaims his government to be dissolved, but just before doing so he arbitrarily parcels out the entire land area of his kingdom to the “ownership” of himself and his relatives. He then goes to the libertarian rebels and says: “all right, I have granted your wish, and have dissolved my rule; there is now no more violent intervention in private property. However, myself and my eleven relatives now each own one-twelfth of Ruritania, and if you disturb us in this ownership in any way, you shall be infringing upon the sanctity of the very fundamental principle that you profess: the inviolability of private property. Therefore, while we shall no longer be imposing ‘taxes,’ you must grant each of us the right to impose any ‘rents’ that we may wish upon our ‘tenants,’ or to regulate the lives of all the people who presume to live on ‘our’ property as we see fit. In this way, taxes shall be fully replaced by ‘private rents’!”

Now what should be the reply of the libertarian rebels to this pert challenge? If they are consistent utilitarians, they must bow to this subterfuge, and resign themselves to living under a regime no less despotic than the one they had been battling for so long. Perhaps, indeed, more despotic, for now the king and his relatives can claim for themselves the libertarians’ very principle of the absolute right of private property, an absoluteness which they might not have dared to claim before.

It should be clear that for the libertarians to refute this stratagem they must take their stand on a theory of just versus unjust property; they cannot remain utilitarians....

But suppose that centuries ago, Smith was tilling the soil and therefore legitimately owning the land; and then that Jones came along and settled down near Smith, claiming by use of coercion the title to Smith’s land, and extracting payment or “rent” from Smith for the privilege of continuing to till the soil. Suppose that now, centuries later, Smith’s descendants (or, for that matter, other unrelated families) are now tilling the soil, while Jones’s descendants, or those who purchased their claims, still continue to exact tribute from the modern tillers. Where is the true property right in such a case? It should be clear that here, just as in the case of slavery, we have a case of continuing aggression against the true owners—the true possessors—of the land, the tillers, or peasants, by the illegitimate owner, the man whose original and continuing claim to the land and its fruits has come from coercion and violence. Just as the original Jones was a continuing aggressor against the original Smith, so the modern peasants are being aggressed against by the modern holder of the Jones-derived land title. In this case of what we might call “feudalism” or “land monopoly,” the feudal or monopolist landlords have no legitimate claim to the property. The current “tenants,” or peasants, should be the absolute owners of their property, and, as in the case of slavery, the land titles should be transferred to the peasants, without compensation to the monopoly landlords.

THUS, THERE ARE TWO types of ethically invalid land titles: “feudalism,” in which there is continuing aggression by titleholders of land against peasants engaged in transforming the soil; and land-engrossing, where arbitrary claims to virgin land are used to keep first-transformers out of that land. We may call both of these aggressions “land monopoly”—not in the sense that some one person or group owns all the land in society, but in the sense that arbitrary privileges to land ownership are asserted in both cases, clashing with the libertarian rule of non-ownership of land except by actual transformers, their heirs, and their assigns.

Land monopoly is far more widespread in the modern world than most people—especially most Americans—believe. In the undeveloped world, especially in Asia, the Middle East, and Latin America, feudal landholding is a crucial social and economic problem—with or without quasi-serf impositions on the persons of the peasantry. Indeed, of the countries of the world, the United States is one of the very few virtually free from feudalism, due to a happy accident of its historical development. Largely escaping feudalism itself, it is difficult for Americans to take the entire problem seriously. This is particularly true of American laissez-faire economists, who tend to confine their recommendations for the backward countries to preachments about the virtues of the free market. But these preachments naturally fall on deaf ears, because “free market” for American conservatives obviously does not encompass an end to feudalism and land monopoly and the transfer of title to these lands, without compensation, to the peasantry. And yet, since agriculture is always the overwhelmingly most important industry in the undeveloped countries, a truly free market, a truly libertarian society devoted to justice and property rights, can only be established there by ending unjust feudal claims to property. But utilitarian economists, grounded on no ethical theory of property rights, can only fall back on defending whatever status quo may happen to exist—in this case, unfortunately, the status quo of feudal suppression of justice and of any genuinely free market in land or agriculture. This ignoring of the land problem means that Americans and citizens of undeveloped countries talk in two different languages and that neither can begin to understand the other’s position.

American conservatives, in particular, exhort the backward countries on the virtues and the importance of private foreign investment from the advanced countries, and of allowing a favorable climate for this investment, free from governmental harassment. This is all very true, but is again often unreal to the undeveloped peoples, because the conservatives persistently fail to distinguish between legitimate, free-market foreign investment, as against investment based upon monopoly concessions and vast land grants by the undeveloped states. To the extent that foreign investments are based on land monopoly and aggression against the peasantry, to that extent do foreign capitalists take on the aspects of feudal landlords, and must be dealt with in the same way....

What, then, is to be our view toward investment in oil lands, one of the major forms of foreign investment in underdeveloped countries in today’s world? The major error of most analyses is to issue either a blanket approval or a blanket condemnation, for the answer depends on the justice of the property title established in each specific case. Where, for example, an oil company, foreign or domestic, lays claim to the oil field which it discovers and drills, then this is its just “homesteaded” private property, and it is unjust for the undeveloped government to tax or regulate the company. Where the government insists on claiming ownership of the land itself, and only leases the oil to the company, then (as we will see further below in discussing the role of government), the government’s claim is illegitimate and invalid, and the company, in the role of homesteader, is properly the owner and not merely the renter of the oil land.

On the other hand, there are cases where the oil company uses the government of the undeveloped country to grant it, in advance of drilling, a monopoly concession to all the oil in a vast land area, thereby agreeing to the use of force to squeeze out all competing oil producers who might search for and drill oil in that area. In that case, as in the case above of Crusoe’s arbitrarily using force to squeeze out Friday the first oil company is illegitimately using the government to become a land-and-oil monopolist. Ethically, any new company that enters the scene to discover and drill oil is the proper owner of its “homesteaded” oil area. A fortiori, of course, our oil concessionaire who also uses the State to eject peasants from their land by force—as was done, for example, by the Creole Oil Co. in Venezuela—is a collaborator with the government in the latter’s aggression against the property rights of the peasantry.

We are now able to see the grave fallacy in the current programs for “land reform” in the undeveloped countries. (These programs generally involve minor transfers of the least fertile land from landlords to peasants, along with full compensation to the landlords, often financed by the peasants themselves via state aid.) If the landlord’s title is just, then any land reform applied to such land is an unjust and criminal confiscation of his property; but, on the other hand, if his title is unjust, then the reform is picayune and fails to reach the heart of the question. For then the only proper solution is an immediate vacating of the title and its transfer to the peasants, with certainly no compensation to the aggressors who had wrongly seized control of the land. Thus, the land problem in the undeveloped countries can only be solved by applying the rules of justice that we have set forth; and such application requires detailed and wholesale empirical inquiry into present titles to land.

Face Time, Extrinsic Measures, and Contract Feudalism

Don't brag to other people about how hard you work. If you go up to someone in Europe and say "I work 10 hours a day, six days a week, 51 weeks a year. Look how much I achieve!" you'll get the same reaction you would in America if you said "I wash my hands exactly 169 times a day. Look how clean they are! Look! Look!!!"

Some of it may simply be more lax cultural attitudes. But some of the difference is an American tendency to create busy-work for the sake of maintaining the appearance of busyness, when nothing really needs to be done.

Don't expect anything to get done in August, don't expect a response to your email the same day. If you really need to get in touch with someone while they are on vacation, or on the weekend, you won't be able to. Which means not that they are being irresponsible. It means you don't really need to get in touch with them.

Atrios expands on this last theme:

During my summers doing temp office work I was always astounded by the culture of "face time" - the need to be at your desk early and stay late even when there was no work to be done and doing so in no way furthered and company goals. Doing your work and doing it adequately was entirely secondary to looking like you were working hard as demonstrated by your desire to stay at work longer than strictly necessary.

One possible explanation for this phenonmenon is the growth of centralized hierarchies to the point that those running them have little understanding of the work being done, and no reliable way to measure the effectiveness of those doing it. As one commenter on this thread remarks,

If you are a manager who is too stupid to figure out that what you should actually measure is real output then the next best thing is to measure how much time people spend pretending to produce that output. Of course you really should know what the output you should measure really consists of. If you don't know that then you are sort of forced into using the time spent measurement.

In my opinion, the salient cause of ineptitude in promotion and in all hiring practices is that, under centralized conditions, fewer and fewer know what is a good job of work. The appearance of competence may count for more than the reality, and it is a lifework to manufacture appearance or, more usually, to adapt to the common expectation. Just as there is reliance on extrinsic motives, there is heavy reliance on extrinsic earmarks of competence: testing, profiles, publications, hearsay among wives, flashy curricula vitae. Yet there is no alternative method of selection. In decentralized conditions, where a man knows what goes on and engages in the whole enterprise, an applicant can present a masterpiece for examination and he has functional peers who can decide whether they want him in the guild....

I have noticed with increasing frequency - from direct experience and from contact with other companies - that common sense is going out the window in favor of easily quantifiable cost savings masking difficult to quantify losses. It amounts to cost shifting and hiding losses while claiming a savings. This has become more common as bean counters with no manufacturing knowledge or experience implement incorrect approaches to cost savings. The feedback process to correct the problem involves too much effort because the obvious losses are difficult to quantify and those in a position to point out the errors will not be rewarded for informing their superiors of the error they have committed.

The reward mechanism for bean counters is disconnected from actual useful measures of savings.

Has anyone else seen this problem growing by leaps and bounds?

I suspect there's still more behind the "face time" issue besides the reasons we've already addressed, though. Besides being a reflection of the irrationality that comes with large size, it also probably has something to do with contract feudalism. The workplace atmosphere of the past thirty years is one of production-worker downsizing, speedups, stagnant real wages, and increasing stress; as a result, the average job is also the scene of increasing disgruntlement, and all sorts of expanding profiling and monitoring systems to keep the disgruntled work-force under internal surveillance.

Management labors under a paranoia similar in kind, if not in degree, to that of the planters of the deep South before the Civil War. The average planter family was surrounded not only by field-slaves, but by household slaves who were present throughout their daily routines, and silent witnesses to conversations and to all the other details of family life. To cope with this state of affairs, the planter class had to manufacture a myth of nescience on the part of the surrounding menials, to keep up the pretense that they were unthinking automatons. They sought constant reassurances that the slaves were really happy and carefree, even grateful, and that they weren't simmering with quiet resentment or hatred. When a slave let slip the mask of nescience, and the master perceived even for a moment that he was in the presence of a critical intelligence who had been constantly observing and evaluating his actions, the reprisals could be brutal.

Management today, similarly, desperately maintains the illusion that we've got our minds right, that we've got our noses firmly implanted in the proper orifice. And when they occasionally get a glimpse of the reality behind the mask, their sense of betrayal can be enormous. That probably explains, in part, the harsh management reaction on discovering that an employee has been blogging about them. The sense of betrayal is the same as if a table or chair suddenly developed a voice. Or if a hitherto dumb brute opened his mouth and cried "Get your stinking paws off of me, you damned, dirty apes!"